Markets Rebound After Trump Delays EU Tariff Deadline
A presidential decision to postpone 50% European Union tariffs caused U.S. and European markets to experience positive market movements on Monday while investors reduced their concerns about rising transatlantic trade tensions.
During his telephone call with European Commission President Ursula von der Leyen Trump agreed to extend the June 1 deadline for imposing a 50% tariff until July 9. During his Sunday address Trump mentioned that he received positive signals from von der Leyen regarding her dedication to negotiate a settlement.
A single announcement triggered a worldwide relief response among investors. The S&P 500 futures moved up 1% as Dow Jones Industrial Average futures gained 0.8%. Nasdaq-100 futures led gains with a 1.4% increase.
Asia's markets showed varied reactions to the news. Japan’s Nikkei 225 gained 0.9% and South Korea’s Kospi jumped 1.4%. Hong Kong’s Hang Seng Index declined by 1.2% alongside China’s Shanghai Composite which decreased 0.1%. Australia’s ASX 200 was flat.
The U.S. stock market experienced declines during the previous week because of Trump's tariff threat which caused Brussels to consider retaliatory measures. The EU stands as America's primary trading partner so a 50% tariff on their products would represent a significant escalation of Trump's trade policies.
The delay happened at a time when investors faced rising uncertainty about U.S. economic direction. Federal Reserve President Neel Kashkari expressed during Monday's interview that businesses continue to hold back from new investments until they obtain clear information about trade agreements.
He also stated that the Federal Reserve would base its interest rate decisions on both economic indicators and geopolitical developments such as trade talks progress. The CME Group's FedWatch tool indicates that markets predict better than a 50% probability of a rate cut before September.
Markets obtained short-term relief from the tariff extension yet investors keep monitoring any indications of failing trade talks.
Mirian Gerling is an expert journalist specializing in environmental issues, public health, and scientific innovation. Known for her clear and insightful reporting, she focuses on making complex topics accessible while highlighting the human stories behind global challenges.